Uranium Week: ESG Considerations For Nuclear 

This story features BANNERMAN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: BMN

As the uranium price slides for a second week, the World Nuclear Association weighs the relevance of ESG principles to investment in the sector.

-Perspectives on ESG for the nuclear fuel cycle
-Potential nuclear energy roadmap for South Australia 
-The weekly spot uranium price falls -2.6% 

By Mark Woodruff

The nuclear power industry and its supply chain is said to already conform with the environment, social and governance (ESG) principles being discussed by investors. 

However, speakers at the World Nuclear Fuel Cycle virtual conference on April 14 agreed industry needed to be more vocal in getting this message across. A panel discussion dedicated to the application of ESG to the nuclear fuel cycle delivered perspectives from the industry’s key thought-leaders.  

Riaz Rizvi, former Chief Commercial Officer of Kazatomprom, moderated the panel which brought together an array of industry experts from the uranium sector.

Partner at Segra Capital Management, Arthur Hyde, noted that for most investors much of the considerations that are driving ESG integration have been part of the investment process for a long time. Those processes, he said, have become more formalised over the past two years. "The non-financial considerations of an investment have risen to a point where they are now viewed on par with the financial considerations."

The Panel noted that uranium companies have operated under elevated scrutiny for many years, which has encouraged adherence to best practice environment and social considerations.  “Every uranium company should be investing a sizeable amount of its budget in those areas," noted presenter of Brandon Munro from Bannerman Resources ((BMN)). This investment has paid off enormously, and over time increases the strategic value of a company. A strong sense of shared social licence with host community makes things easier in future. When done properly and authentically, ESG is a very good investment."

A “nuclear energy road map” should be developed for South Australia, says the South Australian Chamber of Mines and Energy (SACOME). In its recent pre-budget submission to the government, the resources lobby group stated that nuclear, as well as renewables, natural gas and hydrogen, should be on the table as a long-term energy source for the state.

SACOME chief executive Rebecca Knol said the state needed a comprehensive energy plan as the economy moved towards being carbon neutral over coming decades. “We’re seeing the energy future as being one which needs to be agnostic about the energy type,’’ she said. “If we are having meaningful conversations about net-zero by 2050, we need to be looking at all types of energy, not just at hydrogen or just renewables.’’

Ms Knol said there was a lot of regulatory groundwork which needed to be laid before a nuclear industry could develop and it will likely be centred around small, modular reactors. “The technology for nuclear is changing. It’s probably not commercially available until about 2028, but even when it is commercially available, our regulatory settings won’t enable it to be utilised.’’

Country News

China has approved plans to build five nuclear power units totalling 4.9GW of added installed capacity as Beijing pursues plans to reduce its dependence on fossil fuels.

The five units include four Russian-designed VVER-1200 reactors and one 125 MW small module reactor (SMR) demonstration project. The five projects will be developed by China National Nuclear Corp (CNNC), one of the two major nuclear power companies in the country.

China has 50GW of installed nuclear power capacity, the majority of which are pressurised water reactors (PWR) plants. In addition, 17 units are under construction, approximately 40 units have been granted site approval, and 60 more units are planned in the long term.

Company News 

On April 15, uranium explorer 92 Energy ((92E)) became the first uranium developer to float shares on the Australian share market in ten years.

The company’s initial public offering generated $7m by issuing 35m shares at $0.20 per share. 

Chairman Richard Pearce believes it is a unique proposition for investors as it is the only ASX-listed exploration company focused solely on the resource-rich Athabasca Basin in Canada.

Uranium pricing

TradeTech's Weekly Spot Price Indicator is U$29.45/lb, down -US$0.80 from last week.

The number of active buyers in the spot market has declined since last month when buying momentum, led by emerging producers, resulted in significant transaction volumes, explains TradeTech. Three transactions totaling approximately 300,000lbs U3O8 were reported in the spot market this week. 

The Weekly Spot Price Indicator is down -3% in 2021 and has declined in concert with slowing transaction activity in recent weeks. After rising 13% on increased transaction volumes, the indicator has declined over -5% in the last two weeks.

The average weekly uranium spot price in 2021 is US$29.45/lb, US$0.26 below the 2020 average.

TradeTech's term price indicators are US$33/lb (mid) and US$35/lb (long.

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms